Northland Forest Products inks deal with Millar Western

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athabascaadvocate.com – Northland Forest Products has purchased Millar Western’s Boyle sawmill.

The Fort McMurray-based company signed the deal on Dec. 22 to buy the mill and the mill’s timber quotas for $30.7 million. The deal was made public on Dec. 24.

The sale included harvestable land located between Boyle and Fort McMurray.

“The Boyle operation is a good strategic fit for Northland Forest Products,” Northland president Howard Ewashko said in a statement. “We are very pleased to have this opportunity to grow our business and enhance our fibre security.”

Millar Western president and chief executive officer Craig Armstrong said he appreciated the strong support of employees, families, contractors and neighbours since the facility was purchased and reopened in 1994.

“We are pleased the operation will be transferred to a well-run, family-owned organization,” he added.

In the meantime, a Millar Western representative said the company will go ahead with the planned shutdown and layoffs at the mill.

“It’s a phased shutdown. So, as the logs are used up, the various components of the mill will be shutdown,” explained Millar Western communication manager Louise Riopel. “They’re expecting all of that to be concluded by the end of February or beginning of March.”

The first stage of the shutdown will phase out existing log inventory, followed by processing the lumber and, then, winding down sales and other operations.

Whether the sawmill gets back up and running will depend on Northland after an assessment period – which could take up to a year, according to Nikki Zarr, a controller at Northland.

“As for the status of the mill, Northland will have a period of assessing the timber quality and geographical placement,” she said. “This will determine the capacity and purpose of the Boyle mill site.”

The shutdown is a huge loss for the Village of Boyle.

The lumber facility is the largest employer and source of tax revenue for the Village – bringing in $274,000 in taxes and $313,000 in utilities each year.

Boyle Chief Administrative Officer (CAO) Charlie Ashbey said he planned on officially meeting with Northland this week, but the Village will be in a frugal mode.

“Basically, if we lose Millar entirely – which we won’t this year but we would by next year if they don’t operate – we’d be losing roughly 30 per cent of our non-residential tax base,” he said, “which, that’s huge for anybody. So yeah, we’re struggling to replace it. We haven’t ruled out that something won’t be operating at Millar, but we just have to assume the worst for now. We’ll hope for the best but assume for the worst.”

At the provincial level, Athabasca-Sturgeon-Redwater MLA Colin Piquette, said he had spoken with one of the new owners and is cautiously optimistic.

“I’m looking forward to working constructively with the new owners to anchor as much employment in rural areas as we possibly can,” Piquette said.

“Closing the mill has been a big blow – not just to Boyle but to the surrounding community,” he continued. “This is on top of my agenda – to make sure that failing a full reopening, there’s other industries that can help fill the void. That’s what I’m going to be working on in co-operation with the minister of economic development and the minister of agriculture and forestry. Boyle is definitely on the radar.”

In an interview with the Advocate back in November, shortly after the mill closure was first announced, Millar Western director of communications Janet Millar explained that the cost to haul logs long-distances to and from the mill and the loss of Asian markets to cheaper Russian lumber were some of the reasons that affected the facility’s profitability.

She said at least 91 people will be laid off from the Boyle operation. Employees will be given a severance package and six more months of health and wellness benefits.

The mill operation was originally owned by Marathon Lumber, but was decommissioned in the early 1990s. The mill sat empty for two years until Millar Western bought it in 1993 and reopened it the next year.